U.S. homebuyers in the West fueled a rebound in new home sales last month as other regions struggled with tight supply and high prices.
Sales of new single-family houses rose 2% in February to a seasonally adjusted annual rate of 512,000, the Commerce Department said Wednesday. January’s sales pace was revised up to 502,000 units from the previously reported 494,000 units.
After falling 32.1% in January, sales surged 38.5% in the West last month. Excluding the West, home sales fell 8.1%, with the Northeast down 24.2%, the Midwest down 17.9%, and the South down 4.1%.
“The housing market is improving, though in fits and starts and not uniformly across the nation,” Joel Naroff, chief economist at Naroff Economic Advisors, told Reuters.
New home sales account for about 9.2% of the housing market. On Monday, the National Association of Realtors said existing home sales dropped 7.1% in February, reflecting low supply and bad weather.
There were 1.88 million existing homes available for sale in February, up 3.3% from January, but 1.1% lower than a year ago. House prices have been rising by more than 5%, outpacing wage growth.
“The market still has yet to fully rebound from the housing crisis of nearly a decade ago,” the Los Angeles Times said.
Economists and realtors are expecting a solid spring selling season, but caution that the persistent shortage of homes on the market will limit options for buyers and push up prices.
“Spring sales should be decent, but won’t be as good as they could have been if there was more inventory on the market and affordability was a little bit stronger,” said Ryan Sweet, senior economist at Moody’s Analytics.
New home sales were down nearly 4% in the first two months of this year compared with the same period in 2015. But over the past 12 months, they have risen compared with the prior year.
“This reflects a slow but steady increase in demand from homebuyers as well as increasing confidence of homebuilders,” Ralph B. McLaughlin, chief economist at real estate listings website Trulia, told The Wall Street Journal.